France Industry March 2016

France: Industrial production contracts at a softer pace in March

May 10, 2016

In March, industrial production dropped 0.3% over the previous month, which came above the revised 1.3% contraction tallied in February (preciously reported: -1.0% month-on-month). The result came far below than the 0.5% expansion markets had expected. The decline reflected drops in manufacturing, which more than offset a rebound in the construction industry.

In annual terms, industrial output dropped 0.8% in February, which contrasted the February’s revised 0.4% rise (previously reported: +1.7% year-on-year). March’s print is the worst reading since November 2014. Meanwhile, the trend keeps pointing downward. The annual average industrial production dipped from 1.8% in February to 1.5% in March.

FocusEconomics Consensus Forecast panelists expect industrial production to expand 1.3% in 2016, which is down 0.4 percentage points from last month’s forecast. For 2017, participants expect industrial output to accelerate to a 1.8% expansion.

According to the National Institute of Statistics and Economic Studies’ (INSEE) business climate survey on manufacturing activity, the business sentiment index inched up from 112 points in December to 113 points in January.

The IHS Markit flash composite Purchasing Managers’ Index (PMI) ticked up from a revised 59.6 points in December (previously reported: +60.0 points) to 59.7 points in January, marking one of the sharpest rates of expansion in the survey’s history.